Price of Gold up $100 in Past Month to $840
Tuesday, December 16 2008
The price of gold hit historic highs earlier this year in March because of a looming economic crisis and panic. It appears that this panic is back, as the Fed has lowered interest rates to “jump start” the economy, but at the same time, lowering the value of the dollar.
Gold gained 9% last week, which was the highest one week advance in 3 months.
The dollar index, which tracks the value of the greenback against a basket of other major currencies, fell 0.8% on Tuesday. The greenback and dollar-denominated gold prices often move in the opposite direction.
Experts say that the low interest rates will hurt the dollar in the long run.
“If the Fed has to keep rates very low for a long time, that’s going to be awful for the dollar and very good for gold,” said Matt Zeman, a metals trader at LaSalle Futures Group.
Source: Gold rises on dollar’s weakness
Posted in Gold Price News